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Vacation Rental Car Insurance: Myths and Facts

Vacation Rental Car Insurance: Myths and Facts

As a travel enthusiast, I typically get several repeated questions. The first always centers on ways to save money while traveling. The second – rental cars. The insurance myths tend to confuse those of us with wanderlust because every car rental company is different and interprets the law in their own, sometimes self-serving way. After doing some more digging on the subject, Tourist Meets Traveler has broken down some rental car insurance myths and facts.

State Laws

Fact: States require car rental companies to have vehicle insurance.

Myth: States require you, the customer, to purchase special car rental insurance.

Often, rental car companies try to present rental car insurance as a legal necessity that you must purchase. It’s not. The state requires the agency to carry coverage – not the renter. Currently, there is no corresponding law that demands the renter purchase insurance.

Collision-Damage Waivers

Fact: Most agencies aren’t actually giving you insurance, it’s actually a collision-damage waiver that is, as stated above, optional.

Myth: It is always best to just buy the collision-damage waiver.

Often, if you are currently carrying a car insurance policy on your own vehicle, you are already covered. Also, if you book the vehicle with a credit card, you might already be covered thanks to the card. Check your policies and with your credit card company to see what coverage you have, print it off, and take it with you to the rental agency.


Fact: Rental companies can deny you a rental car if you don’t purchase their legally optional coverage or have proof of personal coverage.

Myth: You legally must purchase car rental insurance to rent a car anywhere.

Every company is different and while you are not legally obligated to buy the rental company’s car insurance, they have the right to deny you a rental car. However, the more morally upstanding companies won’t deny you a rental, especially if you have proof that you already have coverage like a personal declaration page.

The Bottom line – car rental insurance offered through car rental companies is legally optional and that is an industry standard. Also, remember that you might already have existing coverage through your personal auto insurance or credit card. If you don’t, also remember that you don’t have to purchase the insurance through the rental company – you can purchase coverage elsewhere and provide proof of coverage to both save you money and satisfy the company’s insurance needs.

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